HIGHLIGHTS

Germany's move toward greater energy storage

Homes may be incubators for the next breakthrough in renewables

Over the past 15 years, the world has been looking to Germany as one model for the utility sector's transformation toward a lower-carbon future. Germany is seeing a surge in renewable energy, specifically offshore wind and solar power, a phase-out of its nuclear energy and a government-driven, full-scale energy transition. Now we may be witnessing the next breakthrough happening right inside German households—energy storage.

The German business case for residential energy storage is strong and links to the country’s long legacy of renewable generation. While some national solar subsidies are scaling down, millions of consumers and small businesses had already tapped into installing solar panel systems, receiving guaranteed feed-in tariffs for years to come. Such schemes have encouraged independence of local consumers from their energy providers, a move buoyed by subsidy-inflated electricity prices that are among the highest in Europe, and on the rise.

Germany’s highly developed market for distributed generation provides a natural basis for home energy storage. Recently renewed federal subsidies for household battery-based storage have enabled retrofitting of older solar systems to be retrofit to include a newer storage solution, which has been attracting foreign technology companies such as Tesla, Panasonic and Samsung to enter the home energy storage market. Competition in this market is likely to be fierce, as several local champions including Varta, Sonnenbatterie and Bosch have also built strong brands in the energy storage market.

Outside of the home, Germany’s strong industrial and automotive sector makes the business case for energy storage particularly attractive. Germany is home to some of the largest automakers in the world; most are determined to stake a claim in the nationwide deployment of electric vehicles. Driven by direct synergies between electric vehicle batteries and residential storage technology, companies including Daimler and BMW have announced their own energy storage offerings for households. Global and local progress in battery technology—driven in part by R&D in the German automotive, industrial equipment and chemical sectors—is expected to drive down costs, further reducing upfront investment from consumers.

German utility companies are recognizing the significant business model potential of more integrated, full-cycle home energy management, and are starting to team up with technology companies, start-ups and automakers to expand their portfolio of home energy storage offerings. Even if the national advanced meter infrastructure still is relatively underdeveloped, utility companies are increasing efforts toward greater ownership of the wider ecosystem of the future energy consumer and related grid services.

According to Accenture’s latest Digitally Enabled Grid research findings, nearly three-quarters of European utility executives surveyed expect their companies’ roles to evolve toward one that integrates distributed energy resources and facilitates the market for DER services as a “distribution platform optimizer." So, while many of the pieces of the home energy storage puzzle seem to be falling into place in Germany, it will be up to the consumers, and utilities’ ability to effectively serve their needs and expectations, that may present the next challenge to be addressed.

Lasse Kari is the European utilities sector research manager at Accenture.

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